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With the Gold Coast Titans in serious financial trouble, the newly formed Australian Rugby League Commission will need to make a difficult decision very soon. Do they help the club out to ensure its survival, or wave the white flag and surrender the Gold Coast to the AFL?
The NRL’s newest club is in danger of extinction due to an estimated $25 million debt, though it’s important to note that the football club itself is profitable.
The real issue is that the club, wisely at the time, decided to diversify its revenue streams and build a five-storey complex that included state-of-the-art training facilities along with commercial office space. The plan was for this ‘Centre of Excellence’ to provide the club with amazing training facilities, while the lease on the office space would generate additional revenue for the football club.
Unfortunately, when the global financial crisis hit, the Gold Coast economy contracted and the office space remained unleased. This meant that the club was left to cover the costs associated with owning a building that was essentially empty.
Loans were required to cover the costs and eventually things spiralled so out of control that the club now finds itself in this unenviable position.
The club now faces the very real prospect of going under, and may require the help of the NRL in order to survive. So what should the NRL do?
Perhaps they could learn from their supposed enemy.
I personally believe that the AFL has been incredibly smart about its own expansion plans. It has been patient and has a long term strategy in regards to growing its footprint.
Most importantly, it’s been generous, investing plenty of money into new teams, along with allowing salary cap exemptions and high draft picks. The AFL quite deliberately ensures new clubs get preferential treatment, helping them to establish themselves early on in their existence.
Crucial to the expansion strategy is the fact other AFL clubs are fully aware of and support the concessions for new teams.
OK, ‘support’ may be too strong a word. Some clubs hate the concessions. But for the most part, the Melbourne AFL clubs recognise that a growing and truly national competition benefits everyone. In particular, it increases sponsorship opportunities and drives up the price of the broadcast deal, which in turn, benefits all clubs.
Why is this relevant to the NRL?
Because they should learn from the AFL’s ability to look at the bigger picture.
New rugby league teams are essentially left to fend for themselves, and get little to no assistance from the NRL. They get little support from most NRL clubs, too, who lack the ability to think about anything other than their own team, and certainly aren’t prone to the sentiment of helping other clubs, particularly new ones.
Yet with the formation of the new Commission, the previous hierarchy’s expansion strategies can be revisited and revised, while NRL clubs’ myopic outlooks are now irrelevant.
The Australian Rugby League Commission’s mandate is to look after the overall health of the game, to act within the best interests of the NRL.
The Gold Coast region is deemed to be of strategic importance to rugby league. It is therefore most certainly in rugby league’s best interests for the Gold Coast Titans, in one form or another, to survive. Quite simply, that means the ARLC should help the Titans out of their financial quagmire.
Yes, it will be perceived as the NRL favouring a team, and the reality is that it will be.
I haven’t got a problem with that, as long as the Commission is making decisions based upon the long term health of the competition and the game.
And I’m not just talking about geography here. There is also the important consideration that the NRL requires eight games a week to fulfil its current broadcast commitments. It needs 16 teams in the competition.
The Titans should in no way simply be given a handout by the NRL. If cash is required, any bailout strategy needs to be met with strict conditions that the club must meet. This could include paying the NRL back over time, or Titans CEO Michael Searle, the man responsible for almost all of the Titans’ decision-making, stepping aside.
The overall point is that if the Commission deems the Gold Coast too important to lose, then the NRL should take a leaf out of the AFL’s book, and prop the Gold Coast up.
Case closed.